- Bitcoin passed $36,000 for the first time since last May, triggering a short squeeze.
- CoinGlass data shows 56,581 traders face $164.39 million in losses.
- Bitcoin’s rally coincides with SEC-Grayscale discussions for potential spot ETF approval.
Bitcoin’s price has soared past the $36,000 threshold, marking the first time since May 2022 that the leading cryptocurrency has reached this level. This uptick has led to “a short squeeze” under a four-hour timeframe, resulting in nearly $50 million of liquidations.
In a recent tweet, the prominent derivative market tracker CoinGlass captured the short squeeze reoccurrence.
For context, a short squeeze is a market phenomenon where a sharp increase in an asset’s price forces short sellers, who have bet against the asset’s rise, to close their positions, propelling the price even higher.
According to CoinGlass data, 56,581 traders were liquidated with $164.39 million in losses. Liquidation, a term dreaded by traders, involves the forceful closure of leveraged positions due to a partial or total loss of the trader’s initial margin. Traders who bet against Bitcoin’s prices took the biggest hit, with $133.17 million evaporated.
CoinGlass data suggests most of these liquidations occurred on the crypto futures exchanges on Binance, OKX, BitMEX, and Bybit. The most significant single liquidation order happened on OKX, with the BTC-USDT pair valued at $7.95 million.
Notably, Bitcoin’s price jump to $36,800 coincided with emerging reports that the U.S. Securities and Exchange Commission (SEC) has initiated discussions with the asset management firm Grayscale. Speculation is rife that Grayscale’s Bitcoin Trust (GBTC) could be converted into a spot exchange-traded fund (ETF), an event many believe would be a significant turning point for the crypto market.
Meanwhile, Bloomberg Intelligence analyst James Seyffart has reiterated strong expectations of a spot Bitcoin ETF approval in the U.S. He argued a 90% chance of a January debut.
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